While all Performance Standards (“PS”) are applicable to this investment, IFC’s E&S due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following PS: - PS1: Social and Environmental Assessment and Management Systems - PS2: Labor and Working Conditions - PS3: Pollution Prevention and Abatement - PS4: Community Health, Safety and Security No impacts were identified in relation to Biodiversity Conservation and Sustainable Natural Resource Management (PS6), and Indigenous Peoples (PS7). Since the project is focusing on rehabilitation of the existing streets, no Land Acquisition and Involuntary Resettlement (PS5) are foreseen as a consequence of the project, except for temporary disturbances in connection with Right-of-Way for water pipe laying. No cultural heritage sites are expected to be associated with these activities (PS 8).

Key social and environmental issues associated with this project include an evaluation of the municipal organization’s capacity to: 1) manage specific health, safety and environmental aspects related to potable water quality assurance and wastewater treatment standards, 2) minimize or avoid land acquisition, bio-diversity, protected area, cultural asset, and landscape impacts, as well as right-of-way aspects related extension of water, wastewater networks, and 3) Occupational, Health and Safety (“OH&S”) aspects of treatment plant operations and road maintenance. These issues are site-specific and readily addressed through mitigation measures. In addition, the project does not have E&S impacts related to Performance Standards 5, 6, 7 or 8. This is therefore a Category “B” project.

The City has presented plans to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with host country E&S and OH&S requirements, E&S requirements as well as IFC’s E&S PS and HSE guidelines. The information about how these potential impacts are being/will be addressed by the Project is summarized in the paragraphs that follow. PS1: Social and Environmental Assessment and Management Systems: IFC’s assessment considered the City’s commitment to long term sustainable development of its investment and the following actions are expected to guide the Project and ensure compliance with PS1: According to Moldovan legislation all new project with potential for negative environmental impacts need to have an Environmental and Social Impact Assessment (“ESIA”), called "ecological expertise" prepared, evaluated, and approved ahead of construction start. To determine if a project needs an ESIA the Law on Ecological Expertise and Environmental Impact Assessment (N 851) has a list of 32 project types or activities requiring ESIA preparation. The ESIA should comprise an evaluation of the potential E&S impacts associated with a project and development of measures to avoid, mitigate, or compensate for adverse impacts. For the current project preliminary ESIA studies were undertaken during the design preparation and the State Ecological Inspectorate reviewed the design documentation. The ecological expertise applied was based upon Moldavian environmental laws, norms, and standards in force and considered ecological, economical and social aspects, which affect the environmental impacts of the project. The outcome of the State Ecological Inspectorate's evaluation of the preliminary ESIA was that the environmental risks and impacts upon implementation of mitigation measures were recognized as general in character and site-specific. As a result a formal full ESIA was not required and therefore not undertaken for this project due to its limited E&S impacts. The water/waste water extension and upgrade project: The City has launched a multi staged sewerage treatment upgrade program, which is implemented by its 100%-owned municipal company ApaCanal. ApaCanal operates water supply system and wastewater infrastructure (water treatment plants, water distribution and sewerage collection systems, including underground pipelines, pump stations) on behalf of the City. ApaCanal has a formal environmental, health, safety and quality management system in place, certified according to the international ISO 14001 (environmental management), ISO 9001 (quality management) and OHSAS 18001 (occupational health and safety) systems. All key elements of the environmental management system such as policy, procedures and practices are therefore established. Regular work safety training relevant to specific job activities is provided to all employees. Annual training programs are established for specific categories of workers, engineers, specialists and managers. The actual extension work of the water and wastewater network will be carried out by contractors selected through a public tender process according to local procurement law. It has been agreed that the bidding documents used to select the contractors will include contract specifications ensuring effective implementation of environmental, health and safety performance criteria by the winning bidder. The contract with winning bidder will include necessary conditions related to HSE compliance with national laws and IFC’s PS and an obligation to inform the City of any significant HSE accidents and events among subcontracted project workers. The tender documents will, according to the agreed Environmental and Social Action Plan (“ESAP”), require the winning bidder to: (i) develop an erosion control plan that include measures to prevent/limit disturbance of soils and vegetation removal to the minimum; prevent soil compaction; (ii) ensure that all ground disturbing activities are conducted consistent with the Water Operator’s General Conditions and Standard Specifications; (iii) develop a traffic management plan that include measures to ensure work zone safety for construction workers and the travelling public; and (iv) the traffic management plan should be approved by the Traffic Police prior to commence of any construction/repair works. Further, the contractors are obliged to follow regulative requirements of the Moldavian law related to traffic safety, occupational health and safety; fire safety; environmental protection; and community health and safety. The streets rehabilitation project: The Project focuses on the rehabilitation of selected streets of the City. Under the Project the road authorities will strengthen the internal capacity to assess and manage broader environmental and social risks of the road maintenance and upgrading activities by providing training to employees, road designers and selected contractors in social, environmental and safety management and monitoring. The actual rehabilitation work will be carried out by contractors selected through a public tender process according to the procurement law. It has been agreed that the bidding documents used to select the contractors will include contract specifications ensuring effective implementation of environmental, health and safety performance criteria by the winning bidder. The contracts with winning bidders will include necessary conditions related to HSE compliance with national laws and IFC’s PS and an obligation to inform the City of any significant HSE accidents and events among subcontracted project workers. The tender documents will, according to the agreed ESAP, require: (i) the winning bidders to develop a transportation management plan for street repairs that include measures to ensure work zone safety for construction workers and the travelling public; and (ii) the transportation management plan should be approved by the Traffic Police prior to commence of any construction/repair works. Further, the contractors are obliged to follow regulative requirements of the Moldavian law related to traffic safety, occupational health and safety; fire safety; environmental protection; and community health and safety. The ESAP, which is attached to this ESRS, contains specific tasks that the City will undertake to mitigate perceived risks and impacts from the planned road upgrades, and to ensure compliance with IFC’s Performance Standards. PS2: Labor and Working Conditions: The Moldavian Labor Code N 154 dated 2003 provides extensive protection for workers and ensures that a large set of social benefits must be provided. National labor laws specify a proper policy against forced labor, discrimination based on gender, race, age, ethnic association or nationality, providing social benefits and trade union possibilities, and are consistent with the International Labor Organization’s core labor standards and IFC’s Performance Standard 2. The project does not result in any direct retrenchment and the authorities strictly follow the commitment to minimum age requirements for all employees and contractors. To ensure OH&S performance of the Project’s operational phase, the Operator has implemented a standard for OHS management that comprises identification of OH&S risks and hazards, development of preventive and mitigation measures and monitoring of their implementation. OH&S issues are also addressed via training of all staff and the provision of appropriate personal protective equipment. The Operator in accordance with the national laws and regulations have established emergency preparedness and response plans, as well as other measures consistent with PS2 requirements. The main occupational health and safety issues of the Project are associated with the construction phase, including potential exposures to fugitive dust emission; heavy equipment noise; physical strain; traffic; pipe welding and trench excavation hazards. The management of the construction phase hazards is addressed through training of personnel in safety procedures; regulation of working hours; provision of appropriate personal protective equipment. In order to minimize risks associated with the construction, construction contractors will be obliged contractually to adhere to EHS specifications consistent with national Labor and Occupational Health and Safety laws and, additionally, to IFC’s Performance Standards. PS3: Pollution Prevention and Abatement: Potential environmental impacts during the Project implementation are principally associated with construction activities and include: increased rate of surface water runoff; generation of solid waste; air emissions; truck traffic and heavy equipment noise; potential hazardous materials and oil spills associated with heavy equipment operation. The road authorities will develop specific plans to minimize adverse social and environmental impacts to appropriate levels. Through contract specifications and monitoring the road authorities will ensure effective implementation of the subprojects. In addition, the road authorities will minimize broader environmental and social risks associated with the reconstructions through appropriate inclusion of specific EH&S conditions in the contracts for Project implementation, repair and maintenance, thereby ensuring contractor compliance with local regulations and IFC’s PS (see attached ESAP). PS4: Community Health, Safety and Security: The main community health and safety risks associated with the Project mainly relates to traffic and pedestrian safety. These risks include localized dust and noise generation, traffic and pedestrian safety in connection with road and sidewalk works, and emergency preparedness. Potential risks to community health, safety and security are evaluated in the planning and design stage and appropriate measures will be incorporate in the contracts. This includes proper design of roads and installation and maintenance of all signs, signals, marking and other devices to regulate traffic according to Moldavian regulation. Specific marking and access protections will be installed and maintained around work trenches to prevent the public from accidental falling into these. There are no other significant community health risks associated with this investment.

Information disclosure is managed by Environmental Department of Chisinau City Municipality. The ApaCanal’s role with affected communities primarily involves contact with customers who may have concerns related to drinking water supply and wastewater system or distribution system failures. Residents have various options to resolve their concerns: visit the company’s responsible managers and specialists in ‘the reception hours’; send a written request to the municipal authorities; or send e-mail at the website of ApaCanal http://www.acc.md. Relevant contacts of Chisinau City Municipality are published at the official website of the Chisinau City www.chisinau.md. The City Municipality will make relevant environmental and social information available, at the official website of the Chisinau City and at the City Municipality building and will publicize these documents’ availability in the municipal newspaper “Capitala”. In addition, the Project will establish a formal community communication channel which will be available to receive comments or grievances about the project, in both the construction and operational phases (www.chisinau.md). To facilitate the inclusion of concerns and complaints of the communities, the City will make sure its contractors to place telephone numbers and contact person names of contractors on the Information Board installed in front of any given work zone. Contact information for grievances will be supported by a recording and handling system, including assignment of trained staff responsible of following up on concerns and complaints.

Contact details are as follows: Mr. Nistor Grozavu Deputy Mayor Chisinau Municipality, MD-2012 Bd. Stefan cel Mare si Sfint, 83 Phone: +373 22/20 15 96 Fax: +373 22/ 54 63 12 website: http://www.chisinau.md.